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Wall Street was preparing to face a difficult start to the week on Monday, the Dow Jones Industrial Average futures losing more than 300 points as investors waited for China's corrective measures after trade talks with the United States United seemed to end in a dead end.
How did the benchmarks perform?
Dow future
YMM9, -1.06%
fell 282 points, or 1%, to 25,682, while the futures contracts of the S & P 500
ES, + 1.86%
fell 33.40 points, or 1.2%, to 2,853.75. Future Nasdaq-100
NQM9, -1.53%
slipped 117 points, or 1.5%, to 7,493.50.
Friday, the Dow Jones Industrial Average
DJIA, + 0.44%
up 114.01 points, or 0.4%, to 25 942.37 after a deficit of more than 350 points. The S & P 500 index
SPX, + 0.37%
up 0.4% to 2 881.40, while the Nasdaq composite index
COMP + 0.08%
climbed 0.1% to 7,916.94.
For the week, the Dow fell 2.1%, its biggest weekly loss since March. The S & P posted a weekly decline of 2.2% and the Nasdaq lost 3%, the biggest loss since the week ending December 21st.
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What motivated the market?
The trade tensions that led to stock volatility last week resumed Monday as investors had to face the conclusion that an agreement between the US and China could take longer than expected. The Washington talks ended without agreement on Friday.
The Trump administration has said it is ready to impose a 25% tariff on Chinese goods worth an additional $ 300 billion, almost all imports from that country, after this right was raised to 10% Friday. Investors are now waiting for retaliation from Beijing. Deputy Prime Minister Liu He, chief negotiator for the country, demanded that tariffs on Chinese exports to the United States be lifted as a precondition for reaching an agreement.
In several tweets over the weekend, US President Trump tweeted that the United States was in an advantageous position on trade, although White House economic advisor Larry Kudlow admitted Sunday that two sides "would suffer. His comment that Trump and Chinese President Xi Jinping could meet at the Group of 20's international conference in June has not appeased investors.
In an editorial published Sunday in the Global Times, a Chinese tabloid published by the Communist Party, "the fierce American offensive is irrational" and the idea that China can not stand a trade war is "a fantasy and an erroneous judgment ".
"China has advanced bilateral negotiations with a keen sense of responsibility and maximum sincerity, but it will never give way to the extreme pressure of the United States or a compromise on matters of principle," said an editorial on Monday. People's Daily, official newspaper of the Central Committee of the Communist Party
In the absence of economic calendar data, investors were likely to remain focused on these tensions. Boston Fed President Eric Rosengren and Fed Vice President Richard Clarida were each scheduled to speak at separate conferences Monday at about 9:00 am Eastern time.
What do the strategists say?
"All goodwill to risk Friday assets has collapsed in Asia, and preservation of capital is the dominant theme, although there is no panic," said Chris Weston, manager of research at Pepperstone.
"Protectionism and the impact it may have on demand can be difficult to model, and he is convinced that with this dynamic, the market will be even less risky, traders wanting a return to the market." their actions, as opposed to their shares, "added Weston.
How do other assets trade?
These trade tensions have spread throughout Asia, where the Shanghai Composite
SHCOMP, -1.21%
closed down 1.2% and the other major indices recorded losses of 1% or more. Europe follows with the Stoxx Europe 600
SXXP, -0.47%
down 0.5%.
When investors gave up their shares, assets such as the Japanese yen got an offer. The yen rose 0.3% to ¥ 109.67 against the dollar.
DXY, -0.04%
But the gold
GCM9, -0.27%
slipped about 0.3%. Industrial metals were down with copper
HGN9, -0.94%
off 1% to $ 2.740 per pound. Oil price
CLM9, + 1.51%
rose after Saudi Arabia announced that two tankers had been attacked near the Strait of Hormuz on Sunday morning.
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